Xcel Energy's bid to change the terms under which Boulder residents can use energy-efficiency and solar rebate programs amounts to "discrimination," City Attorney Tom Carr said Monday.

"We don't think Xcel can discriminate against Boulder customers, unless they're discriminating against people because of their vote, which would be illegal," Carr said.

Xcel filed a request last week with the Public Utilities Commission to tweak its solar rebate program in Boulder, block Boulder customers from participating in future solar gardens and long-term wind-power purchasing programs, and limit their ability to apply for energy-efficiency rebates.

Boulder City Attorney Thomas Carr
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Alastair Worden
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Jerome Davis, the company's regional vice president, said Xcel has to act in the interest of all its ratepayers after Boulder voters approved two ballot measures that allow the city to move forward with creating its own municipal utility.

"Boulder has said to us on several occasions that we should not plan on having them as a long-term customer, so we have to think about the long-term implications of continuing to serve them," Davis said.

The city and Xcel agree that Boulder residents use the various renewable energy and energy-efficiency programs at a higher rate than people in the rest of the state.

That amounts to a net benefit for Xcel, Carr said.

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Davis said that's true -- as long as Boulder residents remain Xcel customers. But if Boulder forms its own utility, they take that benefit with them without having paid for its full cost. That leaves other ratepayers holding the bag.

"We want to continue to offer these programs to our Boulder customers, but we need to do it in a way that our other customers are not subsidizing it," Davis said. "If we can reach an agreement with Boulder, we will pull this application (to the PUC)."

Davis said Boulder needs to provide some sort of "backstop" that would allow Xcel to recoup its costs if and when the city forms its own utility.

Carr said the city asked for additional information about the programs, but before city officials received anything, Xcel filed its application with the PUC.

"We thought we were cooperating and working together, and the letter doesn't reflect that," Carr said.

Davis said the city has a very good understanding of how the programs work and shouldn't require months to come up with a plan for reimbursing Xcel if the city pulls out.

During the election, Davis said the rebate programs might be in jeopardy if Boulder voters approved municipalization. But there's nothing punitive or political about the PUC filing, he said.

"We need to make sure that our other customers are not harmed by Boulder's decision," Davis said. "Our action is a reaction to Boulder's decision. The city can step up and say we'll backstop it or give us some other plan."

Carr said he can't predict how the PUC will see the issue, but he thinks Boulder has a strong case.

"Boulder residents are still Xcel customers," he said.

In its filing at the PUC, Xcel asked for permission to change the Solar Rewards contracts offered to Boulder customers to make it clear that Xcel's obligations to the customer would end if the city leaves Xcel's system. Now, Xcel agrees to pay Solar Rewards customers over 20 years for each kilowatt-hour of electricity generated.

Xcel also asks to restructure its Solar Rewards payment program so Boulder customers would not receive any rebates up front and, instead, would only receive payments over time. Now, customers receive both an up-front rebate and payments over time, though Xcel is working to phase out the up-front payments for all customers.

Also, Xcel is asking to limit the amount of energy-efficiency investments that the utility would make in Boulder -- which often happens in the form of rebates for things such as upgrades to heating and cooling systems -- to the amount of money Boulder customers pay into the system.

All Xcel customers pay a fee on their bills that goes into a collective pot for "demand-side management" programs. Now, the money in the pot is available to all customers.

Finally, Xcel is asking to bar Boulder customers from participating in the upcoming solar gardens program and the proposed long-term Windsource program.

The solar gardens program will allow for renters, condo owners and others without the ability to install solar panels on their own property to purchase panels in a "solar garden" set up on a separate piece of land.

The Windsource program would allow large electricity users to sign contracts for wind energy at a fixed rate over a number of years. The rate is slightly higher than the one paid by regular Windsource customers, who can terminate their wind purchases at any time but, over time, if fossil fuel prices increase, Xcel could end up paying some money back to long-term Windsource customers.

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